10-Q: Born, Inc. Reports Financial Results for Q1 2024, Remains Dormant Shell Company

Born, Inc., a Nevada-based shell company, reported its unaudited financial results for the first quarter of 2024, showing no revenue and continued operating losses as it seeks a business combination.

Summary

• Born, Inc. reported its financial results for the three months ended March 31, 2024.
• The company is currently a dormant shell with no active business operations.
• For Q1 2024, Born, Inc. reported zero revenue and a net loss of $1,817, compared to a net loss of $2,188 in Q1 2023.
• The company's total assets remain at zero, with liabilities consisting of accounts payable and related-party payables totaling $31,934.
• The company is being funded by interest-free demand loans from its Court-appointed custodian, David Lazar.
• Born, Inc. is actively seeking a business combination, such as a reverse merger or asset purchase, to acquire an operating entity.

Sentiment

Score: 2

Explanation: The company is a dormant shell with no operations, significant losses, and an uncertain future, warranting a low sentiment score. However the stated aim of finding a merger target and the funding from the CEO slightly raise the score.

Positives

• The company's net loss decreased slightly from $2,188 in Q1 2023 to $1,817 in Q1 2024.
• The company is actively seeking a business combination to establish operations.
• David Lazar, is providing funding via interest-free loans.

Negatives

• The company has no revenue and no assets.
• The company has a significant accumulated deficit of $117,478,941.
• Born, Inc. has incurred operating losses since its inception.
• The company has a working capital deficit of $31,934.
• The company's disclosure controls and internal controls over financial reporting were deemed ineffective as of March 31, 2024.

Risks

• The company has limited management, labor, and financial resources.
• There is substantial doubt about the company's ability to continue as a going concern without additional funding.
• The company may be unable to obtain financing on acceptable terms, or at all.
• The company faces risks inherent in identifying, developing, and implementing a viable business plan.
• The company may face difficulties in establishing and maintaining adequate internal controls.
• The company may not be able to find a suitable business to merge with.

Future Outlook

The company intends to explore and identify business opportunities, including a potential acquisition of an operating entity. Management anticipates incurring costs related to investigating potential business combinations and filing SEC reports.

Management Comments

• Our Chief Executive Officer has experience in business consulting.
• We do not currently engage in any business activities that provide revenue or cash flow.
• We anticipate incurring costs in connection with investigating, evaluating, and negotiating potential business combinations, filing SEC reports, and consummating an acquisition of an operating business.

Industry Context

Born Inc. is operating as a shell company seeking to merge with or acquire an operating business. This is a common strategy for companies seeking to go public or for private companies to access public markets without a traditional IPO.

Comparison to Industry Standards

• As a dormant shell company, Born Inc.'s financials are not comparable to those of operating companies.
• Shell companies typically have minimal assets and liabilities, and their primary value lies in their public listing status, which can be used to facilitate a reverse merger.

Corporate Governance

Legal Proceedings

• The Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of its business.
• The Company's officers and directors are not aware of any threatened or pending litigation to which the Company is a party.

Related Party Transactions

• David Lazar, the Company's Court-appointed custodian, is considered a related party.
• Mr. Lazar extended $629 in interest-free demand loans to the Company during the three months ended March 31, 2024.
• As of March 31, 2024, the amount due to Mr. Lazar was $16,306.

Stakeholder Impact

• Shareholders: High risk due to the company's dormant status, lack of revenue, and accumulated deficit. Potential for dilution from future capital raises or issuance of shares in a business combination.
• Employees: Not applicable as the company currently has no employees.
• Creditors: Exposure is limited to the current liabilities of $31,934, primarily consisting of accounts payable and related-party payables.
• Customers: Not applicable as the company has no current operations or customers.
• Suppliers: Minimal impact as the company has limited operational expenses.

Next Steps

• The company will continue to investigate, evaluate, and negotiate potential business combinations.
• The company will continue to file required reports with the SEC.
• The company plans to rectify weaknesses in internal controls by implementing an independent board of directors, establishing written policies and procedures, and hiring additional accounting personnel after completing a business acquisition.

Key Dates